Fans of Spanish football from Madrid to Manchester looking forward to a weekend watching the silky skills of Barcelona's Lionel Messi or Real Madrid's Cristiano Ronaldo will be disappointed after a decision to go on strike for the first time in nearly three decades.

Spanish football ought to be on a high, with the national team world and European champions, and Barcelona heralded as one of the finest teams ever to have played the game. But the extent of the economic crisis was revealed on Friday when it was confirmed the top two divisions will go on strike over more than €50m in unpaid wages, ahead of the first weekend of the season. Although there have long been strikes threatened in a sport that is struggling, this is the first one to get the go-ahead for 27 years.

With hundreds of millions of viewers across the world, the financial cost to the league is one thing, but the damage to its reputation is incalculable. The former Spain captain Fernando Hierro warned that it would be "bad for our image".

Analysts say the financial problems of the league are in part due to the great wealth of Real Madrid and Barcelona, the two richest club teams in the world. They earned €120m each in domestic TV rights last year, while Valencia, who finished third, took only one third of that.

When the president of the players' union, José Luis Rubiales, announced the strike he sat before a "team photo" of almost 100 footballers – including the Spain captain Iker Casillas and World Cup winners Carles Puyol, David Villa and Xabi Alonso. The league president, José Luis Astiazarán, accused the union of blackmail.

The league and the players' union have been negotiating over an agreement to cover labour relations between the players, the clubs and the league for some time. Stumbling blocks include image rights, commercial marketing and international breaks, but the key issue is the players' union's demand for a central fund put in place to protect members when clubs fail to pay them. The league agreed with the principle but in practice they were a long way apart.

Rubiales demanded a fund big enough to protect all unpaid wages to all players. The league offered €10m (£8.6m) a year. That, responded Rubiales, would not be enough to cover the debts already accumulated in 2010-2011. "This is not about making more money," he said. "We are not demanding more, we are demanding only that players get paid what it says in their contracts."

According to Rubiales says more than 200 players have experienced salaries being paid late or not at all in the last two years. Last season €52.8m in wages went unpaid. The season before it was €12m.

Spanish football is in financial crisis.

A number of leading clubs, including Betis, Zaragoza and Racing Santander, are in administration. Over the past few years 22 of the 42 clubs in Spain's top two divisions have passed through administration. Part of the reason is that there is no sporting penalty for economic mismanagement: administration becomes an opportunity rather than a problem for some club owners – the chance not to pay players, or other clubs for players they have purchased.

Meanwhile, the economic crisis in a country with more than 20% unemployment continues to grip the game and attendances are down. The players' union has succeeded in bringing a proposed law before the senate to enforce relegation on clubs who do not pay but there is still €52.8m to be recovered from last year alone. The problem, Astiazarán notes, is that the league simply cannot offer what it does not have.

It is a blow for fans, but most sympathise with the players. As well as resolving the conflict, the league must now find alternative dates on which to play the games, with 27 and 28 December the most likely, eating into the traditional Christmas break.